Bitcoin Accounts May Be Subject to FBAR, FATCA Reporting

Taxpayers may soon have to report bitcoin and other virtual currency accounts held in foreign exchanges to the IRS as the agency's focus on foreign assets sharpens, experts told Bloomberg BNA in interviews in October and November.

They said there is a strong possibility that bitcoin accounts could fall within the scope of assets individual taxpayers must reveal to the Internal Revenue Service on the Report of Foreign Bank and Financial Accounts (FBAR).

Eventually, experts said, it is even possible that the foreign exchanges themselves may be considered foreign financial institutions (FFIs) that have to report the accounts to the IRS under the Foreign Account Tax Compliance Act (FATCA).